Spanish vote – bad luck for Greece: Does Iphigenia need to be sacrificed for favourable winds to blow in Eurozone?

Alexis is desperately willing to listen now but Angela’s body language says it is too late! From left to right, Mrs Angela Merkel, Chancellor of Germany and Mr Alexis Tsipras, Prime Minister of Greece. The photo was taken during the 4th Eastern Partnership Summit that took place on 21 and 22 May 2015 in Riga. At this occasion, EU leaders met representatives of the EaP partner countries to reconfirm the importance the EU attaches to its Eastern Partnership (EaP) (Council TV Newsroom, 22/05/2015)

Greece is running out not only of time but also luck. The country’s economy has been pending in limbo for the past four months, exhausting all its resources to survive the financial suffocation that the European Central Bank has imposed following the political orders by Berlin, Paris and Brussels, violating the bank’s “independent” role in the European Union’s universe.

While the “Greek Fall” is in full deployment, last Sunday an arbitrary event took place in one of the Southern “PIGS”, Spain. An event that the Greek political elite does not have really the time to weigh currently, given their exorbitant stress to reach a “magna deal” with the troika. Mr Schauble and his peer in the Eurogroup, though, facing less existential problems than Mr Varoufakis, certainly do so. And this is unfortunately when the luck for Athens comes to an end.

The bitter paella

What happened in Spain 2 days ago is actually similar to what happened in Greece at the European Elections in May 2014. It was there that the foundations for the end of the traditional “cleptocracy” were put. It was there that the star of Alexis Tsipras shined and Syriza gained tremendous power in the Greek voter’s choice by winning New Democracy. Certainly Podemos and Ciudadanos, the two parties that were born in one only noche, did not win the regional elections in Spain.

However, they gained substantial power, stealing a couple of millions of votes from PP (Prime Minister Rajoy’s center right party). In key regional arenas like the wealthy Barcelona, Ada Colau from Podemos, who stood up for people who suffered unemployment during the crisis and inability to pay their mortgages, won the leadership of the city of Gaudi. At the capital Madrid, the highest political fortress of PP for 26 years, Mrs Manuela Carmena from Podemos came second by one mere seat separating her from the mayorship of the Spanish capital.

Wicked Greek politics

While all these “surprises” take place in the Iberia peninsula, forcing Spain’s Prime Minister Mariano Rajoy to accept that there is a lot of work to be done to reconstitute trust towards the Spanish voter, the Greeks allegedly this week are a stone’s throw away from a golden deal with the IMF and the EU. A wicked strategy by Syriza is in full deployment during the last weeks that is followed by several desperate acts and facts .

This is what is happening these days in Greece given that the country is officially flat broke: money from the municipalities of Greece are been called to be centralised under the control of the Bank of Greece; all the embassies and consulates are being asked to pay now all the money they owe to the Greek state; public procurement suppliers of hospitals and schools are not any more getting paid; VAT returns to companies are being stopped; the Greek Prime Minister, Alexis Tsipras, is acting to be manipulated by the Eurogroup leaders acknowledging it was his mistake not to ask a written statement when they gave him their word they will ensure the Greek liquidity; Yanis Varoufakis, the Greek Finance Minister/Superstar, is admitting that the government is reasonably making mistakes because they are a party that jumped from 4% to 40% in one night and that he should not make the 20th February agreement without getting some money from Brussels on his way back to Athens; the IMF is being warned that will not be paid in June and many more. Does all this sound to you bad enough? Bad is really not the word to describe the Greek status today.

Syriza’s hot congress

One needs to add to that the fact that in a meeting of Syriza’s leadership in Athens last weekend many top party members MPs drew distance from an agreement with the troika or “Brussels Group” and some expressed themselves openly in favour of Drachma. While the true left spirit of Syriza was letting loose, the maestro, Alexis Tsipras was preaching about an imminent viable agreement to be stricken in the next days with Brussels. Mr Tsipras spoke to his top party members last weekend about a good deal without crossing the red lines of his politics, which are further austerity measures, something that the troika appears reluctant to abandon.

At the same time, he gives to the Northern European lenders what they really want from him; part of the reason they decided to let drop Antonis Samaras, former Greek Prime Minister, was his reluctance to seriously fight the tax evasion of the big Greek fish. Tsipras, on the contrary, in his latest speech at the recent party’s congress underlined that he will show no mercy to the old traditional politico-economic powers of Greece, owners of Greek media, ship-lords and other Greek jargons that tax evade or engage into corruption. Tsipras thinks that like this he is giving Brussels what it wants. But will it be enough this time?

Austerity: a matter of trust?

While EU leaders sympathise with Tsipras and his will to bring a new better era in the beautiful and historic country, they seem to trust him but this is not the same with the rest of his team. To begin with, they have denounced Yanis Varoufakis as “obnoxious” and “narcissist” asking and managed his immediate removal as a managing leader in the negotiations with the Brussels Group. In addition, they have repeatedly showed their discontent with Panos Kammenos, Minister of Defense and leader of the extreme right ANEL party as well as with others other figures of the current Greek coalition government. That combined with the deep knowledge of the core problems of the Greek political life, makes it impossible for the troika not to insist on austerity measures in order to strike a deal and lend more money to the Greeks.

Spain a Eurozone threat

Tsipras is giving an all-in fight against austerity and is counter-proposing reforms in VAT collection, tax evasion and growth policies. Further he is willing to let Greece go bust in the hands of President Juncker, if Europe does not allow his government to run a relatively austerity free policy. This is the only card he has got, while the lenders have all the rest plus an additional one that was added last Sunday.

The substantial increase of power of Podemos and Ciudadanos, similar/sister left parties to Syriza, is something that is bound not to work our for Greece well. The Spanish General elections are only a few months away now and if the Greek case is repeated, a left anti-austerity party taking down a traditional centre-right EPP affiliate party like PP, then that would be a tremendous earthquake for Eurozone. Greece, a market of 11 million people can produce a big wave in the Eurozone lake but nothing can be compared to the Spanish tsunami that an economy of nearly 50 million people would cause to Eurozone. And then of course there are the domino contagion effects that can be generated to Italy and others.

The modern Iphigenia

Can Eurozone allow this to happen at the point when the European economy is starting to recover from a long recession? Is there a best way to effectively hit Podemos from Brussels by sinking the small Greek boat of Syriza? Although the Greek matter has been hard to predict even for Nobel prize winners in Economics, the Spanish latest voting result is definitely not good news for Greece.

Not to forget that in the homonymous Greek tragedy of Euripide, the Gods demanded that Iphigenia had to be sacrificed for favourable winds to blow.